Posts selected fromManagement Blog - Engineering Blog - Investing Blog and other blogs - Toyota Special Report: Thinking Production System
Minoura warns “simply introducing kanban cards or andon boards doesn’t mean you’ve implemented the Toyota Production System, for they remain nothing more than mere tools. The new information technologies are no exception, and they should also be applied and implemented as tools.”
Early in his career, Minoura worked under Taiichi Ohno, recognized as the creator of the Toyota Production System. Ohno, through tireless trial and error, managed to put into practice a “pull” system that stopped the factory producing unnecessary items. But Minoura observes that it was only by developing this “loose collection of techniques” into a fully-fledged system, dubbed the Toyota Production System or TPS, that they were able to deploy this throughout the company continue reading: Toyota Special Report: Thinking Production System - Is Made in the USA Back In Vogue? (2006)
This example provides more evidence of the benefits of "lean manufacturing," though it seems they are getting only a few benefits (reduction of waste, faster resupply of "hot items") and they may well not know about <a href="http://curiouscat.com/management/leanthinking.cfm">lean thinking</a>. By studying and applying lean ideas they should be able to reduce the 45 day turn-around time. Perhaps they should read the Fashion Incubator blog... continue reading: Is Made in the USA Back In Vogue? (2006) - Secrets of the World’s Best Companies
As Dr. W. Edwards Deming said there is no instant pudding for management (no quick fix). And management requires customization to the organization. You cannot just copy management practices from one place, where they are successful, to another. You can learn from what has been successful and adopt it to your organization if you have knowledge and theory and know how to test (pdsa) the effectiveness of new ideas in your organization.
I don’t find many of the “secrets” mentioned in the article to be the greatest ideas for management (the best ideas I find among the thoughts of Deming, Ackoff, Ohno, Provost, Csikszentmihalyi, Hoerl, etc..
Still, I believe it is good to learn about what others are doing. continue reading: Secrets of the World’s Best Companies - Performance Appraisal Problems
- Visible Data
Take the time to find the important measures and then don’t keep data hidden in some drawer or computer file out of people’s view and therefore out of mind. Post the important data for everyone to see. Review the data as changes are made and see that the changes had the desired result. continue reading: Visible Data - Quality Customer Focus
Customers expectations change over time. Often what was once enough to delight a customer (remote control for a TV) becomes expected. Once a feature is expected the organization gets no credit for providing it they only risk a negative reaction if they fail to provide it. continue reading: Quality Customer Focus - Innovation at Toyota in Developing the Prius
By the end of 1993 the development team had determined that higher oil prices and a growing middle class around the world would require the new car to be both roomy and fuel-efficient. Other than that, they were given no guidance. “I was trying to come up with the future direction of the company,” says Watanabe, who headed corporate planning at the time. “I didn’t have a very specific idea about the vehicle.”
Investing in innovation is risky. If successful, the benefits can build a competitive advantage that is difficult for others to eliminate. However, others will try and if you fail to execute as well in the future those benefits can disappear quickly. Toyota shows few signs of letting others catch up though.
continue reading: Innovation at Toyota in Developing the Prius - Theory in Practice
Knowledge is built upon theory… Rational prediction requires theory and builds knowledge through systematic revision and extention of theory based on comparison of prediction with observation.
W. Edwards Deming, page 102, The New Economics
continue reading: Theory in Practice - Six Sigma Won’t Fix Bad Management?
Like most management concepts how it is applied varies tremendously. If one just uses some tools that are part of the “Six Sigma tool kit” (mostly tools from TQM and the like) then you might improve bad management only marginally.
But if you read the work of Roger Hoerl, Soren Bisgaard, Forrest Breyfogle III… and learn and apply what they talk about as Six Sigma you will definitely have to address bad management practices. Their Six Sigma is definitely a management improvement system (you can’t apply their concepts of Six Sigma without fixing many bad management practices). continue reading: Six Sigma Won’t Fix Bad Management? - Using Design of Experiments
Design of Experiments can seem complicated but at the core it is fairly simple and powerful. By applying the proper techniques it allows you to gage the effect of several variables and, very importantly, the interactions of those variables with a small number of experiments (or tests or pilots).
George Box is a wonderful author (and friend) who can write for mangers who are not knowledgeable about statistics and statisticians. Statistics for Discovery does a good job of explaining how organizations should use experiments to improve. continue reading: Using Design of Experiments - Good Customer Service Example
Recently I bought a new digital camera, Canon A700. Part of the reason I bought it was I had heard they actually provided customer service – you could call them and they answered and helped (plus they have long practiced good management improvement concepts, in general).
Well I received my camera and I could not open the battery compartment: which was quite frustrating. I tried following the instructions but I couldn’t get it to open. So I tried calling Canon and I got a person on the phone within 30 seconds (there was system to direct me to the right person but it was as speaking the answer to a couple questions).
Within a couple minutes the service person (based in Virginia and a Canon employee, as I understand it) had picked up a Canon A700 and explained how to open the door. continue reading: Good Customer Service Example - People: Team Members or Costs
Both Toyota and GM seek to use technology to improve but Toyota sees the technology as useful to help people to be more efficient, eliminate menial repetitive tasks, eliminate tasks that cause injury… and it seems to me GM saw technology as a way to eliminate people. The action showed a company that viewed people as a cost to be eliminated. GM did not act as though people were their “most important assets” as we so often hear, but see so little evidence of in the action of companies.
Toyota does try to reduce overall costs (including labor costs) by continually improving and making cars more and more efficiently (so they can produce cars using fewer hours of labor in the future than they need today). Trying to become more efficient by engaging everyone in the effort is a part of the system of management at Toyota. The current Toyota employees are an important part of the system and are not viewed as a cost to eliminate.
continue reading: People: Team Members or Costs - A Company’s Purpose is to be Useful to Society
- Problems with Bonuses
Commission pay and bonus often set up a conflict between what is in the interest of the company and the employee. They lead to bunching of orders around quarterly quotas, deadlines and competitions. They lead salespeople to think their job is to sell whatever pays them the most not to assist the customer. continue reading: Problems with Bonuses - Lean Manufacturing Success
Not only is this a nice story but it is one small example of the good people working at GM and Ford. The problem is not the individual workers it is management. It is too bad that those companies, that did take great strides in the 1980 and early 1990s to improve (starting with Deming’s Management ideas) let those efforts fade away. continue reading: Lean Manufacturing Success
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